No Double Dipping

San Diego city councilmember Carl DeMaio says he was shocked when he saw some of the payments made to retired city employees, so shocked he thought it was a joke. It wasn’t.

On Tuesday, February 11, in a crowded press room on the 13th floor of the City Hall building, just hours after Mayor Sanders announced a two-billion-dollar deficit in the city’s pension fund, Councilmember DeMaio revealed the shocking numbers to the public as part of the third report on the excesses of the city’s labor and retirement benefit program.

Titled “The Million Dollar Circle,” the report issued by DeMaio’s office discloses payouts to five retiring city employees in 2008 in excess of a million dollars. The report also uncovers 86 instances of pension allowances during 2008 that were over six figures.

“The figures we are about to show will likely outrage the average taxpayer,” said DeMaio from the podium.

“A total of 1774 city employees have a cash value of $333 million dollars in funds sitting in the pension system in DROP accounts, all earning — during this down market — a guaranteed, risk-free 7.75 percent rate of return.”

It’s not just the lump-sum payouts that have DeMaio outraged; it’s also the “double dipping” going on by many high-level city employees enrolled in the Deferred Retirement Option Program (DROP).

“The DROP program allows employees to ‘double dip’ [and] bank retirement payouts at 8 percent compound interest for five years. All the while, they continue to draw their city salaries.”

According to the report, immoderate payouts have caused the city’s pension deficit to skyrocket by 1475 percent since 1998.

As a temporary fix, DeMaio called on San Diego’s Pension Board to drop the guaranteed interest rate of 7.75 percent down to 4 percent at their February 20 meeting.

“This item is on the agenda for consideration by the pension board, and I hope they are listening.”

DeMaio estimates that such a reform would save taxpayers $3.5 million in 2011 and reduce pension liability by 250 million dollars.

When asked if DeMaio participates in the DROP program he said he was embaraased to participate. By not enrolling, DeMaio says he saved $28,500 from his office budget and used the extra funds to pay for an additional constituent service representative.

Closing out the press conference, DeMaio reiterated his disgust with the excessive benefit payouts. “They are a few people at the top of this Ponzi Scheme, and I use that term decidedly, who are able to be part of that million dollar circle. And because eof those excesses the retirement security of every employee is threatened.”

Comments

Dorian,
The SDCERS board already lowered the assumption rate for DROP and was already planning to do it again -- all without DeMaio's input. He's simply grandstanding about an already done deal.

Further, you've got some facts wrong and DeMaio did nothing to correct you. DeMaio says he was "embarrassed" to enroll in DROP and that he saves $28K by not enrolling in DROP. He CAN'T enroll in DROP. He's not eligible. Further evidence of his grandstanding.

DeMaio contradicts himself by correctly stating that the assumption rate is 7.75%, but then grandstands some more by repeatedly using the bogus 8% figure. Further, he fails to mention that in years past the system made 14%, but only paid 8%. What happened to that money? I guess he forgot about it.

DeMaio repeatedly uses the catch-phrase "double dipping". I'd like your opinion, Dorian. If someone retires from the military and takes a second job are they "double dipping?" That's exactly what DROP is. City retirees are simply investing their own vested retirement funds.

Lastly, Carl fails to explain why it's apparently OK for him to become a millionaire with government contracts, but not OK to earn a negotiated wage and retirement worth far less.

DeMaio is just fishing for media attention with this press release. Looks like you bit.

DeMaio contradicts himself by correctly stating that the assumption rate is 7.75%, but then grandstands some more by repeatedly using the bogus 8% figure.

DeMaio repeatedly uses the catch-phrase "double dipping". I'd like your opinion, Dorian. If someone retires from the military and takes a second job are they "double dipping?" That's exactly what DROP is.

No that is nto what DROP is.

And when you put your life on the line all over the world for pay that can be as low as $1,500 a month like military personnel do then you can make such an argument-but you don't and you never will.

Fred, you say that we shouldn't send the whole crew to medical calls. I have a question. If you go into a hospital with a critical illness, how many people will be around your bed? I'm guessing more than the 6 we send. Plus they don't have to move obese folks from the third floor. We have absolutely no way to pre-screen those calls any better. Trust me. We'd like to keep that engine available for the next call.

And since you brought it up, medical calls are often just as dangerous as fires. I suppose you've never had the pleasure of wrestling with a drunk covered in blood and puke... in a wrecked car... wedged under a leaking gasoline tanker. I have. Ever had a pissed off HIV+ patient try to spit in your eye? I have. Intubated a bloody Hep C+ traffic accident victim? I have. Wrestled a 300 lb naked, sweaty, combative diabetic with low blood sugar? Well, you get the point.

Back around the turn of the 20th Century, the Chief of the FDNY said, "Firemen are going to get killed. When they join the department they face that fact. When a man becomes a fireman his greatest act of bravery has been accomplished. What he does after that is all in the line of work."

I think you'll find most firefighters are fairly humble about what it is that they do. Proud, but humble. Nonetheless, people hail us a heroes. Most guys I know hide from the TV cameras.

You're reading a lot into my statements above. I don't think anyone should "bow down to me" and I have a ton of respect for those we serve. I regularly remind those I work with that while some of the emergencies we respond to don't seem like much to us, the person calling has obviously lost control of some portion of their life and needs our help. That's what we do.

There should be a two-tier wage system for them like military, since we're making comparisons.

While they are sitting around, cooking, working out, shopping, watching TV, playing cards, and other trivial homemaking things at the firehouse pay them $15 an hour. When they are on a call, clock the time and give them "combat pay type" compensation at $40 an hour.

Wow Ponzi, I hope you never have to call 911. I think that firemen deserve the pay that they get.

They work their asses off to get the job, they are constantly at the ready to serve. It can be anything from your granny choking on a chicken bone to a burning furniture warehouse spewing toxic chemicals.

I know that there is a resession and the the city is broke, but we need to look somewhere else to make cuts.

Wow Ponzi, I hope you never have to call 911. I think that firemen deserve the pay that they get.

They work their asses off to get the job, they are constantly at the ready to serve. It can be anything from your granny choking on a chicken bone to a burning furniture warehouse spewing toxic chemicals.

I know that there is a resession and the the city is broke, but we need to look somewhere else to make cuts.

- Joe

You're obviously a FF or connected to one.

Anyone that says a $200K per year job that requires no college degree, where the actual number of FIRE calls they go on represent 3-5% of their work, is either a FF or a family member of one.

No one says that except FF's (and their families) If they were subject to competition I am sure the compensation could be reduced 75%, or more, with no drop off in service levels.

Nope, I'm not a fireman.. I know 1 or 2 of them, and I think that a cousin of mine is a FF out in the Lagunas.

They don't have to go to college to become firefighters, but the training is pretty damn intense and does take a couple of years to complete.

$40 an hour is about $80K a year if you are a saleried employee.

from: http://www.bls.gov/k12/help03.htm
"In 2006, the middle half of all firefighters earned between $29,550 and $54,120 annually. The lowest-paid 10 percent earned less than $20,660. The highest-paid 10 percent earned more than $66,140.

Johnny V, get over your angry little man complex, from the stuff I have seen you post you obviously could not cut it as a cop or firefighter. If you are in fact an attorney take pride in the fact your types(attorney's)have cornered the market in owning the most pages of a phone book, you win!!!.